Stock Analysis

What Does Orion Energy Systems' (NASDAQ:OESX) CEO Pay Reveal?

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NasdaqCM:OESX
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Mike Altschaefl has been the CEO of Orion Energy Systems, Inc. (NASDAQ:OESX) since 2017, and this article will examine the executive's compensation with respect to the overall performance of the company. This analysis will also assess whether Orion Energy Systems pays its CEO appropriately, considering recent earnings growth and total shareholder returns.

See our latest analysis for Orion Energy Systems

How Does Total Compensation For Mike Altschaefl Compare With Other Companies In The Industry?

Our data indicates that Orion Energy Systems, Inc. has a market capitalization of US$286m, and total annual CEO compensation was reported as US$942k for the year to March 2020. That's a notable increase of 36% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at US$335k.

On comparing similar companies from the same industry with market caps ranging from US$100m to US$400m, we found that the median CEO total compensation was US$847k. So it looks like Orion Energy Systems compensates Mike Altschaefl in line with the median for the industry. Furthermore, Mike Altschaefl directly owns US$6.8m worth of shares in the company, implying that they are deeply invested in the company's success.

Component20202019Proportion (2020)
Salary US$335k US$325k 36%
Other US$607k US$370k 64%
Total CompensationUS$942k US$695k100%

On an industry level, around 31% of total compensation represents salary and 69% is other remuneration. It's interesting to note that Orion Energy Systems pays out a greater portion of remuneration through salary, compared to the industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

ceo-compensation
NasdaqCM:OESX CEO Compensation December 30th 2020

Orion Energy Systems, Inc.'s Growth

Orion Energy Systems, Inc.'s earnings per share (EPS) grew 106% per year over the last three years. In the last year, its revenue is down 25%.

Shareholders would be glad to know that the company has improved itself over the last few years. While it would be good to see revenue growth, profits matter more in the end. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has Orion Energy Systems, Inc. Been A Good Investment?

We think that the total shareholder return of 947%, over three years, would leave most Orion Energy Systems, Inc. shareholders smiling. So they may not be at all concerned if the CEO were to be paid more than is normal for companies around the same size.

To Conclude...

As we touched on above, Orion Energy Systems, Inc. is currently paying a compensation that's close to the median pay for CEOs of companies belonging to the same industry and with similar market capitalizations. The company is growing EPS and total shareholder returns have been pleasing. So one could argue that CEO compensation is quite modest, if you consider company performance! In fact, shareholders might even think the CEO deserves a raise as a reward due to the fantastic returns generated.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We did our research and spotted 3 warning signs for Orion Energy Systems that investors should look into moving forward.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

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